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Summary

  • Urban Outfitters is expected to report its first year-over-year decline in earnings in the past two years.
  • Our contributing analysts are looking for the clothing retailer's earnings to come in 3 cents per share higher than the Wall Street consensus.
  • Year-over-year revenue is expected to grow by 6%.

Urban Outfitters Inc. (NASDAQ:URBN) is set to report FQ1 2015 earnings after the market closes on Monday, May 19th. Urban Outfitters owns and operates a chain of retail clothing stores. This quarter Wall Street is expecting the clothing company to post earnings of 5 cents per share lower than FQ1 of last year and for year over revenue to grow by 6%. Urban Outfitters has posted growing earnings and revenue in each quarter over the previous two years but is expected to buck that trend for the latest quarter. Here's what investors are expecting from Urban Outfitters.

The information below is derived from data submitted to the Estimize.com platform by a set of Buy Side and Independent analyst contributors.

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(Click Here to see Estimates and Interactive Features for Urban Outfitters)

The current Wall Street consensus expectation is for Urban Outfitters to report 27 cents EPS and $688.27M revenue while the current Estimize.com consensus from 14 Buy Side and Independent contributing analysts is 30 cents EPS and $697.87M in revenue. This quarter the buy-side as represented by the Estimize.com community is expecting Urban Outfitters to edge past the Wall Street consensus by a comfortable margin.

Over the previous six quarters the consensus from Estimize.com has been more accurate than Wall Street in forecasting Urban Outfitters's EPS and revenue 3 and 4 times, respectively. By tapping into a wider range of contributors including hedge fund analysts, asset managers, independent research shops, students and non-professional investors Estimize has created a data set that is more accurate than Wall Street up to 69.5% of the time.

The magnitude of the difference between the Wall Street and Estimize consensus numbers often identifies opportunities to take advantage of expectations that may not have been priced into the market. Here we are seeing a larger than usual differential between the earnings expectations from Wall Street and Estimize.

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The distribution of estimates published by analysts on the Estimize.com platform range from 26 cents to 34 cents per share and from $672.00M to $715.00M in revenues. This quarter we're seeing a moderate range of estimates on Urban Outfitters.

The size of the distribution of estimates relative to previous quarters often signals whether or not the market is confident that it has priced in the expected earnings already. A wider distribution of estimates signals less agreement in the market, which could mean greater volatility post earnings.

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Throughout the quarter the Wall Street EPS consensus fell from a high of 34 cents to 27 cents while the Estimize consensus started and ended the period at 30 cents. Meanwhile Wall Street reduced its revenue consensus from $713.32M to $688.27M while the Estimize consensus rose late in the period from a low of $694.34M to $697.87M. Timeliness is correlated with accuracy and the directionality of analyst revisions going into an earnings report is often a leading indicator. Here we see diverging revenue expectations between Wall Street and the Estimize community.

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The analyst with the highest estimate confidence rating this quarter is turbinecity who projects 28 cents EPS and $696.09B in revenue. turbinecity was our Winter 2014 season winner and is ranked 2nd overall among over 4,450 contributing analysts. This season turbinecity has been more accurate than Wall Street in forecasting EPS and revenue 60% and 51% of the time, respectively, throughout a staggering 1,063 estimates.

Estimate confidence ratings are calculated through algorithms developed by deep quantitative research which looks at correlations between analyst track records and tendencies as they relate to future accuracy. In this case turbinecity expects Urban Outfitters to beat Wall Street's expectations but fail to live up to the consensus from the Estimize community.

On Monday Urban Outfitters is expected to report its first year over year decline in earnings in the past two years. With that being said, contributing analysts on the Estimize community are looking for the clothing retailer's earnings to come in 3 cents per share higher than the Wall Street consensus and for revenue to exceed the Street's forecast by nearly $10 million.

Disclosure: None.

Source: What The Buy Side Expects From Urban Outfitters